Comments on: You know, there might be a business here http://www.philiphodgetts.com/2007/07/04/you-know-there-might-be-a-business-here/ Philip Hodgetts' random thoughts and items of interest on where the industry is at, and where it might be going today and into the future. Sat, 22 Nov 2008 04:05:51 +0000 http://wordpress.org/?v=2.5 By: Philip http://www.philiphodgetts.com/2007/07/04/you-know-there-might-be-a-business-here/#comment-12441 Philip Mon, 09 Jul 2007 23:24:03 +0000 http://www.philiphodgetts.com/2007/07/04/you-know-there-might-be-a-business-here/#comment-12441 More that I read about Gary Vaynerchuck in Time and watched a single incidence of the podcast to check it out. Thanks for the $50 million, not $5 million correction. I must have misread. AS for the cost of bandwidth... good question. If we take a typical, long term deal with a CDN like Limelight or Akami and you'll pay about 50c (or less) per GB on volumes of 24 TB/month (based on 10,000 subscribers) or about 6c per download. That would eat a hole in the profitability of the enterprise. However, it may be that a better deal can be negotiated. If he went with Amazon's S3 and some custom programming, then the cost of bandwidth is 15c/GB not 50c/GB and the CDN capability is built in. That would drop the cost per show delivered to about 2.5c Including some allowance for the storage charges at Amazon. So the take would net to $750 a day, $3750 a week, $15,000 a month and only $180,000 a year. It wasn't so much that Gary should do this, but that the sorts of numbers that a show can achieve *are* enough to fund a "comfortable middle class income". Philip More that I read about Gary Vaynerchuck in Time and watched a single incidence of the podcast to check it out. Thanks for the $50 million, not $5 million correction. I must have misread.

AS for the cost of bandwidth… good question. If we take a typical, long term deal with a CDN like Limelight or Akami and you’ll pay about 50c (or less) per GB on volumes of 24 TB/month (based on 10,000 subscribers) or about 6c per download. That would eat a hole in the profitability of the enterprise. However, it may be that a better deal can be negotiated. If he went with Amazon’s S3 and some custom programming, then the cost of bandwidth is 15c/GB not 50c/GB and the CDN capability is built in. That would drop the cost per show delivered to about 2.5c Including some allowance for the storage charges at Amazon.

So the take would net to $750 a day, $3750 a week, $15,000 a month and only $180,000 a year.

It wasn’t so much that Gary should do this, but that the sorts of numbers that a show can achieve *are* enough to fund a “comfortable middle class income”.

Philip

]]> By: Carey D http://www.philiphodgetts.com/2007/07/04/you-know-there-might-be-a-business-here/#comment-12439 Carey D Mon, 09 Jul 2007 23:09:27 +0000 http://www.philiphodgetts.com/2007/07/04/you-know-there-might-be-a-business-here/#comment-12439 Hey Philip, Nice to see you've noticed Gary Vaynerchuk. I've watched his daily podcast (mostly via iTunes) since he had but a few hundred daily viewers. BTW he's pretty open about discussing his inherent conflict in reviewing wines and also making his living selling it. He tries to be candid about it including reviewing wines he does not sell and also not being afraid to completely shred a wine his store sells a lot of. So at least in my mind he's earned his credibility as a reviewer. Whatever the case, while this example might not be the greatest since in this case the podcast supports a $50 million (not $5m) a year wine business, rather than being a podcaster/entertainer where your product IS the podcast itself. Having said that...I'm wondering about the economics of bandwidth. Gary's show runs about 120MB of data for a 20 minute Quicktime delivered daily. Forget production costs for now...what is the cost of delivering 120MB per user, per episode, of a video podcast, especially those popular enough to require the use of a CDN (content delivery network). I have heard bandwidth is getting cheaper, but don't have a sense of the current costs associated with such a venture. I'm wondering how much, if any, of that 10 cents per episode would be eaten away by the cost of delivering it? Carey Hey Philip,

Nice to see you’ve noticed Gary Vaynerchuk. I’ve watched his daily podcast (mostly via iTunes) since he had but a few hundred daily viewers. BTW he’s pretty open about discussing his inherent conflict in reviewing wines and also making his living selling it. He tries to be candid about it including reviewing wines he does not sell and also not being afraid to completely shred a wine his store sells a lot of. So at least in my mind he’s earned his credibility as a reviewer.

Whatever the case, while this example might not be the greatest since in this case the podcast supports a $50 million (not $5m) a year wine business, rather than being a podcaster/entertainer where your product IS the podcast itself.

Having said that…I’m wondering about the economics of bandwidth. Gary’s show runs about 120MB of data for a 20 minute Quicktime delivered daily. Forget production costs for now…what is the cost of delivering 120MB per user, per episode, of a video podcast, especially those popular enough to require the use of a CDN (content delivery network). I have heard bandwidth is getting cheaper, but don’t have a sense of the current costs associated with such a venture. I’m wondering how much, if any, of that 10 cents per episode would be eaten away by the cost of delivering it?

Carey

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